Question

multiple choice question
which of the following explains why a pure monopolist is able to maintain an economic profit in the long run?
o there are no new entrants to increase supply, drive down price, and eliminate profit.
o there are no new entrants to decrease supply, drive up price, and eliminate profit.
o there are no new entrants to increase supply, drive up price, and eliminate profit.
o there are no new entrants to decrease supply, drive down price, and eliminate profit.
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Explanation:

In a pure monopoly, barriers to entry prevent new firms from entering the market. Without new entrants, the monopolist's supply is not increased. An increase in supply by new firms would drive down the price in a competitive - like scenario and eliminate economic profit. Since there are no new entrants, the monopolist can maintain economic profit in the long - run.

Answer:

There are no new entrants to increase supply, drive down price, and eliminate profit.